BIS announces 75:25 cost sharing proposals for DEAct

The Department for Business Innovation and Skills has today finally published its response to the Digital Economy Act  (DEAct) cost sharing consultation. As expected, the Government has gone for a 75:25 rights holder to ISP split for costs of both notification and the appeals process. The Internet Service Providers’ Association (ISPA) and others argued long and hard for a beneficiary pays principle, which suggests that in fact the BIS postition should read 100% Rights Holder pays. That was always going to be a difficult one to win considering the whole dubious history of the DEAct.

The BIS response can be read here.  In it they say “Placing part of the costs on ISPs mean they have a real incentive to ensure they adopt the most effective and efficient process in processing CIRs and issuing notifications.”  Whilst I understand the logic in trying to ensure that the costs are minimised they (BIS) I wonder if there is somewhere in European Law relating to government subsidies of industry – because that is effectively what is being done here.  The Government is indirectly subsidising the Creative industry by taxing the internet industry and giving the taxes to Rights Holders.

BIS has also extended the deadline for the initial obligations code to be implemented by a further 3 months so that the costs regulation can be notified under the EU Technical Standards Directive.

I note that for the moment the Government has dropped the idea of a feed to partake in the appeals process because of the additional costs of managing this overhead (ensure fairness & make sure less well off did not have to pay etc).  They have however said that they might yet introduce a cost to enter an appeal if it looks as if people were abusing the process – the idea has been speculated on in the past that mass appeals might be conducted in order to choke the system and render it ineffective.

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  1. Trefor Davies

5 Comments

  1. Well at least its better than the full cost being on ISPs and passed on to the customer, but I agree, the 100% should have been on the rights holder. The whole thing is a shambles and for once I pity Ofcom having to sort it out. The digital economy act wants binning and starting again. The only ones who will profit from it are the ambulance chasers.
    chris

  2. In terms of the law on government-imposed subsidy of one industry by another, you might want to consult a suitably trained person on “EU state aid laws”, and whether this counts as state aid or not.

    My understanding is that it doesn’t – because it’s not specific to particular content providers, it’s not state aid. OTOH, I’m not an expert, so I could be completely and utterly wrong.

  3. Wouldn’t be cheaper for any Major ISP that falls under #DEAct to provide a VPN for their customers? The rightsholders wouldn’t be able to trace anyone, sparing the ISPs the costs of sending nastygrams to their customers. It would also highlight how stupid the Digital Economy Act really is.

  4. I’ve always said that we would not support any costs approtioned to us in respect of this and it’s a real disappointment to see all the hard work and effort by ISPA and ISP’s being ignored in favour (again) of the rights holders and creative industries.

    They need to remember that without our networks they don’t do anything with their bloody content.

    It’s time ISP’s started to seriously fight back.

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